Today:
[b]Existing-home sales seasonally-adjusted annual 5.43 million rate in May, down 0.4% from April via National Association of Realtors
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Under median forecast for a 5.52 million pace.
Sales of previously-owned homes fell for the second straight month, as a supply shortage continues to bite the market. In May, sales were 3% lower than a year ago, and April revised down.
At the current pace of sales, it would take 4.1 months to exhaust the available inventory, well below the 6 months that’s traditionally been considered a sign of a balanced market.
Total inventory in May was 2.8% higher than in April, but 6.1% lower than a year ago. Properties typically stayed on the market for 26 days in May.
In May, the median sales price for an existing home was $264,800, a 4.9% annual increase.
First-timers made up 31% of buyers in May, down from 33% in April, and again well below the long-time historical average of 40%.
In May, sales in the Northeast rose 4.6%, but that was the only region to chart an increase.
In the Midwest, sales were down 2.3%, in the South they dipped 0.4%, and in the West, they fell 0.8%.
Don’t blame higher mortgage rates for the weakness in sales, said Freddie Mac Chief Economist Sam Khater. “Sales have fallen in six out of the last nine months dating back to the fall of 2017. In May, home sales above $250,000 grew 6%, while sales of homes below $250,000 shrank by 8%. It’s clear the lack of inventory is binding for the affordable end of the market. While this is the best economy in the last 20 years, many potential buyers have been sidelined and unable to purchase. The more worrying concern is that relief is not coming anytime soon.”
Pantheon Macro Chief Economist Ian Shepherdson, writing ahead of the release, was even more grim. “Looking forward, it’s quite hard to be optimistic about the outlook for housing over the next year,” he said.
“We aren’t expecting a meltdown, or anything like it, but the combination of higher mortgage rates and tightening lending standards will weigh on demand.”